Legal Question in Real Estate Law in Maryland
I purchased a home 2 months ago with a USDA loan. I remember signing a paper at settlement stating that this home will be my primary residance. Since purchasing the home I got engadged and think that I want to rent the house out rather that sell it when I move into my Fiancee's house. Will I be in default with the mortgage company if I rent the house out? I didn't know that I was getting engadged when I purchased the home and had every intention of residing in the house. I would think that the mortgage company wouldn't care who lives there as long as they get their payment.
1 Answer from Attorneys
Congratulations on your recent home purchase and upcoming marriage.
Whether a property is owner occupied or not DOES matter to a lender (if you ever try to get a loan for a piece of rental property you'll discover that interest rates are significantly higher than for a home mortgage). That being said, the occupancy statements do not mean you promise to live in the house forever -- usually a borrower promises to move in within 60 days of settlement and to stay there for at least one year.
If someone falsely states they plan to live in a property when they have no intention of actually doing so, it may constitute mortgage fraud. In your case, it sounds as though you had every intention of living in the home you purchased. If you are unable to meet the minimum required occupancy due to changed circumstances, you would be well advised to contact your lender and seek its consent to move out before the timeframe stated in your Deed of Trust.
While not legal advice, I hope that this post helps!
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